In what seemed like a showdown for the ages, both Democrats and Republicans came together to avoid a potential catastrophe, which now brings up a discussion regarding stocks to buy after the debt ceiling resolution. Primarily, the debt deal bodes relatively well for consumer sentiment. Basically, you don’t want to make too many bold decisions with a debt cloud hanging over your head.
Also, one of the safe stocks post-debt ceiling drama to consider involves pet projects that cater to political interests. The Democrats generally want to build out various infrastructure projects. In particular, the debt ceiling deal helps accelerate renewable energy investments. The Republicans, they managed to fully fund national defense expenditures while also cutting non-defense spending. Thus, on paper, companies tied to the military may represent some of the best stocks after the debt ceiling debate.
| AMZN | Amazon | $126.57 |
| NEE | NextEra Energy | $73.98 |
| LMT | Lockheed Martin | $459.87 |
Amazon (AMZN)
Primarily, the inclusion of Amazon (NASDAQ:AMZN) on this list of stocks to buy after debt ceiling resolution centers on clarity. Should the U.S. renege on its financial obligations, the unprecedented nature of this action (or lack of action) would create many ambiguities. That’s not something the market enjoys. It’s certainly not something consumers enjoy, particularly as a failed compromise might have impacted livelihoods.
However, with the two parties basically agreeing to kick the can down the road until Jan. 2025, AMZN offers its candidacy for best stocks after the debt ceiling. Fundamentally, e-commerce as a percentage of total retail sales has picked up considerable momentum. In the second quarter of 2022, this stat sat at 14.5%. As of Q1 2023, it increased to 15.1%. Therefore, the drama fading should help lift consumer sentiment.
Also, Amazon represents a growth machine that benefits from broader political stability. On a per-share basis, the company’s three-year revenue growth rate clocks in at 21.9%, above 83.69% of the competition. Therefore, AMZN makes a great case for high-potential stocks after the debt ceiling resolution.
NextEra Energy (NEE)
For NextEra Energy (NYSE:NEE), its inclusion for stocks to buy after the debt ceiling resolution aligns with political dynamics. According to The Wall Street Journal, the debt ceiling bill “…makes some of the most far-reaching changes to the country’s landmark environmental law in decades, potentially accelerating new renewable-energy investments championed by the Biden administration.” I see this as good news for NEE stock.
Per the WSJ, the bills “…tightens the scope of environmental reviews required under the National Environmental Policy Act of 1970 and allows more projects to win approval without having to undergo the most complex types of reviews.” With the conflict in Eastern Europe also pressuring the drive for energy alternatives, NextEra could be a major beneficiary. Thus, NEE is one of the post-debt ceiling stocks to consider.
To be fair, NextEra as a utility company doesn’t offer sterling financials. For example, its balance sheet presents some risks, especially with its lowly cash-to-debt ratio of 0.03 times. However, because it’s a powerful utility firm, it hits home regarding consistent profitability. For that, it’s one of the safe stocks post-debt ceiling drama.
Lockheed Martin (LMT)
A controversial idea for some investors because of its defense applications, Lockheed Martin (NYSE:LMT) nevertheless represents one of the stocks to buy after debt ceiling resolution. In terms of relevance, LMT is a big winner. Politically speaking, both President Joe Biden and various high-profile Republicans have spoken highly of our servicemembers. Therefore, getting the debt deal passed enables clarity, especially for defense spending.
Another reason why LMT ranks among the high-potential stocks after debt ceiling centers on the broader geopolitical environment. Increasingly, nations adversarial to the U.S. have tested its resolve. One can also argue that other countries have toyed with the Biden administration to find any vulnerabilities. Therefore, as one of the spears in the national defense architecture, Lockheed stands as a cynical beneficiary.
Also, those looking for bargains among the best stocks after the debt ceiling should consider the defense contractor. Currently, the market prices LMT at a forward multiple of 17.24. As a discount to projected earnings, Lockheed ranks better than 63.46% of the competition.
On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
